Roy Harris column: 'Never sell Grandpa's paper'

For the Bancroft family, no longer anchored in Cohasset, turning the Wall Street Journal over to Rupert Murdoch could be a sad choice

By Roy Harris

Editor's note: This is for Saturday, July 28, release.

The decision on whether Rupert Murdoch's News Corp. will take the helm at Dow Jones & Co. and its flagship Wall Street Journal rests with the now-near-celebrities of the Bancroft family.

I'm predicting a vote to sell, which would bring $1.2 billion for the family's whole stake - a 67 percent premium - and would follow the Dow Jones board's recommendation. If I'm right, the Journal's long-cherished independence will be sacrificed, and the public will be immeasurably poorer for it.

We're being told that the vote is too close to call. But one thing is clear already from the three months of wrangling among nearly three dozen far-flung family members: The century during which control of the Journal was anchored quietly, but securely, in the town of Cohasset is history.

It was a remarkable era - one that allowed the paper to develop into a jewel of American journalism, winning fans with its uniquely eclectic blend of business and finance coverage and sagacious editing. Its definition of news reflects one guiding principle: that every good story is, at root, a business story. But another principle lay in the paper's organization: that journalists should run the show, just as Boston business writer Clarence Barron was in charge when he purchased Dow Jones in 1902.

It was in that year that the affiliation with Cohasset began. Barron, who had married the widow Jessie Waldron and used $130,000 of her money (only $2,500 of it in cash) to buy the company, had homes on Beacon Hill and in New York. But it was at their Cohasset Harbor summer estate, The Oaks, where he greeted the world's rich and powerful, often in nautical attire that looked a bit peculiar on his 5-foot-5, 330-pound frame.

An outstanding journalist, he had been involved in the 1920 expose of the original Ponzi scheme, by Charles Ponzi himself. (Barron had served as an expert source for the Boston Post, which won an early Pulitzer Prize for exposing the investment fraud that the silver-tongued scam artist perpetrated.) As a media owner, Barron combined business publishing in Boston, New York, and beyond, advancing the use of telegraphic services although the Journal was not to take the form of a great national newspaper until more than a decade after his death, in 1928.

Control of Dow Jones passed first to stepdaughter Jane Barron Bancroft and her husband Hugh Bancroft, and then to step-granddaughters Jessie Bancroft Cox and Jane Bancroft Cook. The sisters held control of the company's stock, along with expansive Cohasset acreage, during the Journal's glory days.

Those days dawned during World War II, with the invention of the modern Journal under the leadership of legendary editor Bernard "Barney" Kilgore. He broadened the definition of business news, introduced the paper's hallmark offbeat stories to the otherwise-serious front page, and made a familiar feature of the "What's News" business-and-finance and world-wide summaries, which have survived even recent redesigns. Steadily, the paper's coast-to-coast circulation increased along a curve that would take it beyond 2 million copies by the end of the century. Its journalistic excellence helped it draw reporters from colleges and from other papers.

Years after Kilgore was replaced by other reporters-turned-editors-turned-CEOs, I was one of the journalism school graduate hires, in 1971. While friends at other papers had to worry about management changes and layoffs, I and my fellow Journal staffers luxuriated in the knowledge that ownership was in the safekeeping of Mrs. Cox and Mrs. Cook, the Cohasset widows whose family maxim was well-known to us: "Never sell Grandpa's paper."

That reassuring position provided encouragement among staffers even in April 1982, when Mrs. Cox died at 73 - strangely, just after a Manhattan party celebrating Dow Jones's centennial. Likewise, there was no fear of a sale in 2002, when the 90-year-old Mrs. Cook died at her Oak Farms estate along Sohier Street, just above the Bancroft family equestrian center that by then had become the South Shore Music Circus.

Coming to Cohasset for her funeral, Dow Jones CEO Peter Kann, then the latest in a line of former reporters to run the company, noted that "her abiding commitment to editorial integrity and corporate independence will continue to guide the company, its management, and its owners." The company issued a statement that her death would not result in a change in voting control, since Bancroft family members and associated trusts continued to hold control through a "supervoting" system that gave their "Class B" stock 10 votes for ever vote of the publicly-traded shares.

In the fertile journalism environment that was the Journal, Pulitzer Prizes came in abundance. The paper has won 25 since 1980, including its first-ever Pulitzer for public service this year, for exposing companies' improper "backdating" of stock-option grants, which gave executives excessive compensation, while costing shareholders millions of dollars.

At the same time, though, the Bancroft-family underpinning of the Journal's independence was coming unpinned. First, some family members were quoted in the press as being upset about Dow Jones management stumbles in the world of electronic publishing. Newer rivals, like Bloomberg, had stolen its business.

All the while, Murdoch's global News Corp. empire of papers and Fox broadcasting and film industries thrived, building a market capitalization of $70 billion, and fueling the media baron's hunger for the Journal. After the Internet stock-market bubble burst in 2000, Dow Jones's own market value was sliced in half, to less than 5 percent of News Corp. If Murdoch could divide the Bancroft family, he could conquer Dow Jones.

In 2006, Peter Kann turned over the chief executive reins to the company's former chief financial officer, Richard Zannino --the first non-journalist to assume leadership. Zannino has been among those arguing that Murdoch's deep pockets could provide needed capital for the growth of Dow Jones. Finally, the board of directors agreed.

The war over the Journal's future was most clearly defined, though, in the rift between Bancroft family members. Reports focused on three branches - the Coxes, Cooks, and Bancrofts - that had sprouted from the three Cohasset-based grandchildren of Clarence Barron. Each branch seemed to have its divisions over whether to sell.

The homes of family members now spread from Rome to Hawaii, and those who remain in New England hail from places like Burlington, Vt.; Lyme, N.H.; and Round Pond, Me. (Like the family, the Bancroft family property has also been subdivided; and since Mrs. Cook's death, part of Oak Farms near Route 3A, has been proposed for a development of 27 single-family homes.)

The Journal's own detailed coverage of the family intrigue shows a relatively silent group of members who seem persuaded by the $60-a-share offering price, for a total of $5 billion, that they don't think Dow Jones can reach on its own. (The per-share price before Murdoch's offer was in the mid-30s.) Other members are angry about the cousins who want to sell, and they note especially Murdoch's penchant for meddling with coverage at outlets like FOX News and the New York Post, often reflecting his own conservative political ideals.

How will the voting go? In a few days we'll have the answer, mailed in or phoned in from around the globe to the family members' lawyers and trustees.

The estate where Mrs. Cook died in 2002 now stands empty on its Oak Farms hilltop. A wild turkey strutting on the driveway panics at an approaching car. I wonder if the decision of the family members would be any different were they to return to this house, sit beneath portraits of the family matriarchs and patriarchs, and take a show of hands on a simple question: "Should we sell Grandpa's paper?"

Roy Harris worked for the Wall Street Journal from 1971 to 1994, and is now a senior editor with The Economist Group's Boston-based CFO Magazine. His first book, "Pulitzer's Gold: Behind the Prize for Public Service Journalism," is due out from University of Missouri Press around year-end. He lives in Hingham.